Nucor shares were down early Tuesday as the steel production company said it expects a sequential decrease in fiscal fourth-quarter earnings and posted lower third-quarter results on an annual basis amid price headwinds in the steel mills segment. Lower average selling prices and reduced volumes are anticipated to drag down earnings in Nucor's steel mills and products segments for the fourth quarter, the company said late Monday.
Profit in the raw materials division is expected to rise on a sequential basis, excluding an impairment charge taken in the previous quarter. The consensus among four analysts on Capital IQ is for GAAP earnings of $1.39 per share for the fourth quarter. The stock decreased 3% in premarket activity. For the three months through Sept.
28, Nucor's net earnings dropped to $1.05 a share from $4.57 the year before. Four analysts surveyed by Capital IQ expected $1.17. On an adjusted basis, the company posted EPS of $1.49, compared with the Street's view for $1.41. The company didn't provide a year-ago figure for adjusted EPS. Sales slid 15% year over year to $7.44 billion in the third quarter, but topped six analysts' consensus estimate of $7.23 billion.
Average sales price per ton fell 15% year on year, while shipments slipped 1%. Earnings before income tax and non-controlling interests in the steel mill division slumped to $309.1 million from $882.6 million last year due to lower prices and volumes. Steel products earnings tumbled to nearly $314 million from $806.7 million last year.
The company recorded a loss of $66.3 million in the raw materials segment versus earnings of $71.4 million last year primarily due to a non-cash impairment charge of $83 million related to certain non-current assets. Marketing, administrative and other expenses fell to $244.7 million from $385.8 million in the prior-year period.
The company generated more than $1.3 billion of cash from operations for the quarter, Chief Executive Leon Topalian said in a statement. "Nucor's market leadership, product diversity, and strong balance sheet enable us to provide meaningful returns to shareholders and execute our growth strategy even in the face of market uncertainty," according to Topalian.
Price: 152.00, Change: -4.11, Percent Change: -2.63.